The charities and not-for-profits sector (sector) in Australia is large, diverse and provides many services to the community. In recent decades it has also experienced major opportunities and disruptions including the outsourcing by governments of human services, competition for contracts from commercial companies, the development of outcomes measurement of services, introduction of consumer directed care services, new forms of online fundraising and the use of new technologies.

In evaluating the effectiveness of the Australian Charities and Not-for-profits Commission Act 2012 (Cth) and the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Act 2012 (Cth) (ACNC Acts), the Panel was conscious of the need to find a balance between red tape reduction, supporting a vibrant, innovative sector and public expectations of transparency, accountability and good governance. These expectations have been highlighted in royal commissions and other inquiries and a small number of high profile cases of misconduct.

There is strong support for the Australian Charities and Not-for-profits Commission (ACNC) and its accomplishments in the first five years, with the sector acknowledging the collaborative and educative approach taken by the ACNC. The Panel considers this approach should continue and there is an opportunity to broaden the use of incentives to encourage good behaviour and use powers available to enforce the law in matters of misconduct.

The Report makes 30 recommendations. Among the recommendations and conclusions, a common theme is the need for a national scheme for the sector, requiring a referral of powers from the States to the Commonwealth.

Australia currently has eight separate jurisdictions whose regulatory regimes impact upon charities and not-for-profits, with the Commonwealth Government’s regulatory requirements, through the ACNC Acts and the tax system, overlaying each of these. This results in inconsistency, complexity and inefficiency for charities. The Panel is strongly of the view that a national scheme is the best option for the sector going forward, especially in areas such as governance, fundraising and registration. In the absence of a national scheme, the sector will continue to be subject to an unacceptable level of unnecessary red tape.

While the Panel has recommended the long term goal of moving towards a national scheme, it has also made recommendations to address issues in the short term that have been identified.

The Report has been divided into four parts: Part A covers objects, functions and powers, Part B addresses the regulatory framework, Part C outlines red tape reduction and Part D contains additional legislative amendments.